Post on 26-Dec-2015
Kenneth B. Kahn Ph.D.
New Product Forecasting Issues
Kenneth B. Kahn, Ph.D.The University of Tennessee
Department of Marketing and Logistics315 Stokely Management Center
Knoxville, Tennessee 37996-0530(865) 974-2609kkahn@utk.edu
Kenneth B. Kahn Ph.D.
New Product Forecasting Issues
Low accuracy (high forecast error)
Low credibility
Limited amount of data available for analysis
Inability to fully capture market complexity, cannibalization, market penetration rate, etc.
Limited amount of time for analysis
Kenneth B. Kahn Ph.D.
New Product Forecast Accuracy
Source: Kenneth B. Kahn, Journal of Product Innovation Management, March 2002
Type of New Product
Average % Accuracy Achieved (Standard
Deviation, Sample Size)
Forecast Horizon in Months (Standard Deviation,
Sample Size)
Cost Improvements 71.62(s=22.46, n=29)
21.15(s=21.15, n=40)
Product Improvements 64.88(s=23.63, n=45)
19.96(s=18.20, n=102)
Line Extensions 62.76(s=22.25, n=45)
20.84(s=18.58, n=97)
Market Extensions 54.33(s=24.02, n=42)
23.58(s=21.26, n=93)
New Category Entries(New-to-the-Company)
46.83(s=24.31, n=30)
34.56(s=35.21, n=45)
New-to-the-World 40.36(s=24.72, n=39)
36.08(s=35.96, n=93)
Note: n = Sample sizeS= Standard deviation
Type of New Product
Average % Accuracy Achieved (Standard
Deviation, Sample Size)
Forecast Horizon in Months (Standard Deviation,
Sample Size)
Cost Improvements 71.62(s=22.46, n=29)
21.15(s=21.15, n=40)
Product Improvements 64.88(s=23.63, n=45)
19.96(s=18.20, n=102)
Line Extensions 62.76(s=22.25, n=45)
20.84(s=18.58, n=97)
Market Extensions 54.33(s=24.02, n=42)
23.58(s=21.26, n=93)
New Category Entries(New-to-the-Company)
46.83(s=24.31, n=30)
34.56(s=35.21, n=45)
New-to-the-World 40.36(s=24.72, n=39)
36.08(s=35.96, n=93)
Note: n = Sample sizeS= Standard deviation
Type of New ProductType of New Product
Average % Accuracy Achieved (Standard
Deviation, Sample Size)
Average % Accuracy Achieved (Standard
Deviation, Sample Size)
Forecast Horizon in Months (Standard Deviation,
Sample Size)
Forecast Horizon in Months (Standard Deviation,
Sample Size)
Cost ImprovementsCost Improvements 71.62(s=22.46, n=29)
71.62(s=22.46, n=29)
21.15(s=21.15, n=40)
21.15(s=21.15, n=40)
Product ImprovementsProduct Improvements 64.88(s=23.63, n=45)
64.88(s=23.63, n=45)
19.96(s=18.20, n=102)
19.96(s=18.20, n=102)
Line ExtensionsLine Extensions 62.76(s=22.25, n=45)
62.76(s=22.25, n=45)
20.84(s=18.58, n=97)
20.84(s=18.58, n=97)
Market ExtensionsMarket Extensions 54.33(s=24.02, n=42)
54.33(s=24.02, n=42)
23.58(s=21.26, n=93)
23.58(s=21.26, n=93)
New Category Entries(New-to-the-Company)New Category Entries(New-to-the-Company)
46.83(s=24.31, n=30)
46.83(s=24.31, n=30)
34.56(s=35.21, n=45)
34.56(s=35.21, n=45)
New-to-the-WorldNew-to-the-World 40.36(s=24.72, n=39)
40.36(s=24.72, n=39)
36.08(s=35.96, n=93)
36.08(s=35.96, n=93)
Note: n = Sample sizeS= Standard deviation
Note: n = Sample sizeS= Standard deviation
Cost Reductions
Kenneth B. Kahn Ph.D.
There is no silver bullet when it comes to new product forecasting.
New product forecasting success is a result of data, experience, cross-functional communication, business knowledge, and being connected to the customer.
Use a toolbox approach when applying new product forecasting techniques.
New product forecasting requires reconciliation of multiple techniques based on judgment and analytical skills.
New product forecasting is a process of assumptions management.
Think in terms of ranges, not specific numbers.
Some Keys to New Product Forecasting Success
Kenneth B. Kahn Ph.D.
Course Agenda
New Product Forecasting Issues and Considerations
Judgmental Approaches for Forecasting New Products
Customer- and Market-Research Based Techniques
Quantitative Approaches for Forecasting New Products
Managing the New Product Forecasting Process